On July 5, AIG International (AIGI) launched AIGFX, a new online FX trading service on Bloomberg. AIGFX, created by AIGI, a member company of American International Group, Inc, and Bloomberg LP, gives corporate clients, pension funds, asset managers and hedge funds the ability to trade FX spot and forwards on their Bloomberg terminal.
Profit & Loss talked to AIGI’s Chief Operating Officer, Robert Feilbogen, and Bloomberg FX manager Jim Mahn about the new trading platform and how customers can take advantage of it.
Q: A strong case can be made for trading online. What differentiates AIGFX?
AIGFX provides the customer with all of the information necessary to trade and confirm online. Customers can view Bloomberg composite currency prices, financial market indices, and headline news. The AIGFX price request involves minimal keystrokes and offers a streamlined workflow.
Q: How do clients access AIGFX? Do many clients have a Bloomberg terminal?
The AIGI home page can be found on Bloomberg by typing AIGFX <go>. Many FX clients already subscribe to Bloomberg, so cost is not an issue. Also, Bloomberg will offer free-trial terminals to customers to try out this new service.
Q: What is the current functionality of AIGFX?
The first version of the service allows clients to view Bloomberg composite prices, request and execute a spot or forward FX trade with AIGI, all done through a simple and easy to use trading screen.
Q: What are the future enhancements?
Bloomberg and AIGI are developing enhanced functionality including a customisable home page and access to AIGI’s research. AIGI intends to replace Bloomberg composite prices with its own indicative pricing, as well as a “click and deal” capability. Another enhancement is STP, straight through processing, which would eliminate the ticket writing process altogether, as well as streamline the back office workflow.
Q: What currencies are traded?
The current version of AIGFX includes 17 pre-set currency pairs, primarily G7 and the major crosses, as well as some emerging market currencies. But, many liquid currencies can be traded via an “Other” key, whereby clients can request the currency of their choice. In a later version, the customisable screen will allow clients to pre-set their most frequently traded currency pairs.
Q: Is AIGFX limited to spot and forward FX?
In the future, we would like to add more products like FX swaps and options. Other products might include precious and base metals, as well as the Dow Jones – AIG Commodity Index SM.
Q: Is AIGFX Bloomberg’s first online FX product ?
Bear Stearns launched their FX trading product a few months earlier; however, unlike AIGFX which offers two-way price request, the Bear Stearns product is a one-way price request trading platform.
Q: What is the future of the Bloomberg online trading platform?
Bloomberg plans to offer a multi-bank contributor platform (although not commingled prices) that will link clients to as many as 40 banks. So far, AIGI, Bear Stearns, Bank of Montreal, Fleet Bank, HypoVereinsbank and Prudential-Bache
Global Markets have all signed up for the portal, with 20 other banks waiting in the queue.
Q: So customers are embracing electronic trading?
The most forward thinking customers are embracing technology. We’re in a new environment today. The tools for trading are undergoing a sea change.